March, 2020 - Coronavirus and Force Majeure

The rapid escalation of the COVID-19 outbreak is having a huge impact on the shipping industry. Many parties are having to review their contractual obligations in light of the developing situation.In this article, we focus in on force majeure provisions in the context of COVID-19.

On 30th January, 2020 the World Health Organizationdeclared that the outbreak of the new coronavirus COVID-19 was a Public Health Emergency of International Concern. On 11th March, 2020 it labelled the outbreak a “pandemic”. Measures adopted by governments aimed at containing or delaying the spread of COVID-19 are causing widespread disruption to international trade and shipping. As a result, companies in the maritime sector may find themselves unable to perform their contractual obligations. Where the relevant contract contains a force majeure clause, the question arises as to whether the affected party can rely on the provision to provide relief from liability.